Bacolod City will stay as one of the preferred outsourcing operations locations in the country this year, the international real estate and research firm, Colliers, said.

But scaling up the city’s talents, improving competitiveness, and constructing more offices are needed to welcome companies looking for viable sites outside of Manila and Cebu.

Joey Bondoc, research manager of the Colliers International-Philippines, told the DAILY STAR yesterday that the firm believes that Bacolod is still a preferred location for outsourcing operations in the country.

In an e-mail, Bondoc said that Colliers has observed that a number of existing voice business process outsourcing (BPO) firms are continuously expanding while some knowledge process outsourcing (KPO) companies are looking at the city as a potential site outside of Metro Manila, he said.

Despite being one of the preferred areas, Bacolod needs to scale up its talent pool and develop more office towers to corner a large fraction of the local KPO pie, Bondoc said.

The firm has projected that this year until 2021, the bulk of office spaces will be fueled by call centers and smaller KPO companies that provide health information management, software engineering, and financial technology services.

For 2019, Colliers sees office vacancy hovering between 5 and 6 percent and there will be no substantial change in vacancy rate in the next 12 months as this will be supported by the planned expansion of BPO and KPO firms already operating in Bacolod.

Monthly office lease rates will also rise between 2 and 4 percent per annum over the next two to three years in view of the sustained demand from both BPO and traditional companies, and limited upcoming supply, it added.

Tenants and landlords were also urged by Colliers to explore opportunities in the Bacolod port and old airport site that can be redeveloped into mixed-use projects.

CHALLENGES

Colliers said among the challenges that Bacolod will face this year is improving its rank in the global competitiveness surveys and to increase furnished office spaces as the firm sees a lack of buildings in the city ready for occupancy.

In 2018, Bacolod remained as one of the most attractive outsourcing locations in the world after its ranking in the Tholons Top 100 Supercities improved, from 97th in 2017 to 89th last year.

“Further improvement in global competitiveness surveys is crucial if Bacolod is to attract more investors in the near to medium term,” Colliers said.

The sufficient number of college graduates equipped with necessary skills should sustain Bacolod City’s viability as a global outsourcing destination, as Colliers said a number of firms reported difficulties in filling up KPO seats.

Colliers said that Bacolod’s colleges and universities produce nearly 14,000 graduates each year with about one-third as Business degree holders while close to 30 percent hold Engineering, IT, Math, and Medical-related degrees.

Having sufficient manpower is important as the city aspires to become a major game development and health information management (HIM) destination outside Metro Manila, it added.

The firm’s projection also recommended that local and national players develop more plug-and-play spaces in Bacolod as a number of smaller KPO companies are looking at the city for possible expansion.

But most of these firms have an immediate need for furnished office spaces, Colliers said.

The KPO firms that mainly provide game development, software engineering, online tutorial services, and HIM services are compelled to look for plug-and-play spaces due to the need to deliberately reduce capital expenditures, it also said.

Private-public partnerships are also urged by Colliers to provide calibrated training for students, that are the future workforce in the IT-BPO industry.*